Search
Close this search box.
Sign up for our weekly Newsletter

Small firms see rise in business confidence

905_BizConfidence246x155
Small business owners: confidence is rising

Share

30 April 2011

Business woman drinking coffee
Small business owners: confidence is rising

THE Federation of Small Businesses Index for the first quarter of 2011 reports that business confidence has improved since the end of 2010, even though small businesses’s employment intentions weakened.

At the end of 2010 a balance of -2.5 per cent of businesses thought they would have to make cuts to their employment levels. However, -6.5 per cent actually decreased headcount during the quarter – suggesting businesses are having to make tough decisions, says the Federation of Small Businesses (FSB).

This comes as unemployment figures released recently showed that both female and youth unemployment rose while the overall unemployment figure fell to 2.48 million in the three months to February. However, looking ahead to the next three months, businesses paint a more encouraging picture with fewer members reporting that they will decrease (-1.7) headcount.

The FSB has called on the government to help businesses by extending the National Insurance Contributions (NICs) holiday to the very smallest businesses. This would help small firms to take on staff – especially in those areas reliant on the public sector where unemployment is likely to rise further.

Small business confidence, which the Small Business Index measures, rose for the first time to +6.7 in the first quarter, after falling in each quarter in 2010 – no doubt linked to the fact that the economy has returned to growth. In total 36 per cent of small firms expect overall business performance to improve in the next three months.

However, across the UK, business confidence is weakest in those areas heavily dependent on the public sector. Small firms in Northern Ireland are least confident at -25 per cent and Wales is second lowest at -11 per cent. This gives further clout to the need to extend the NICs holiday.

John Walker, National Chairman, Federation of Small Businesses, said:

“The fact that more small businesses had to lose staff in this quarter than they anticipated is a worry – especially as female and youth unemployment both edge towards a million. If the government truly wants the private sector to pick up the slack that its austerity measures create, small businesses need a helping hand.

“At the end of 2010 the feeling across the country was very downbeat as businesses lost confidence, having to deal with a rush of challenges from the impending rise in VAT, to the economy dipping back into negative territory. This continued into 2011 as fuel prices increased and inflation affected spending power. Nevertheless, the first quarter’s overall picture suggests that members are bouncing back from a harsh winter.”

Share this article

Facebook
Twitter
LinkedIn
WhatsApp
Reddit
Email

Want more motoring news?

Sign up here for our free weekly serving of motoring.

Sign up here for our free weekly serving of motoring.

Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

Latest news

Top